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Cardamom, the queen of spices, entered the digital age last week with the launch of an electronic auction intended to create transparency in its trading. The spice, the world’s most expensive after vanilla and saffron, has been traded in the traditional outcry system of bids, which is more susceptible to collusion between traders and auctioneers. The Spices Board of India hopes the e-auction will give small traders a better deal by preventing cartels forming between their bigger rivals, reported The Australian 1/9/07, pg.36 New system to promote competition The new system has been developed by Tata Consultancy Services (TCS), India’s largest software services provider, to keep the identity of bidders secret, thus discouraging speculation and promoting competition. It is also designed to ensure error-free documentation, eliminating hidden costs and speeding up invoicing. The first e-auction will be in Bodinayakanur, in the southern state of Tamil Nadu, before spreading to four other auction centres in Vandanmedu, Kumli, Thekkady and Pulianmala in the neighbouring state of Kerala. Cardamom prices affected by drought Cardamom is an aromatic and versatile spice used in both sweet and savoury dishes. The oil from its seeds is used in processed foods, tonics, liquors and perfumes. It is also considered to have healing properties and is widely used in Ayurvedic medicine. Until Guatemala recently accelerated its cultivation, India was the world’s largest cardamom producer. However, Indian growers have suffered five years of drought and the country’s annual production fell last year to 11,535 tonnes and the average price per kg to 350 rupees ($10.40). In the year to March, India exported 1500tn of cardamom, valued at 169.5m rupees. The main buyer of the spice is Saudi Arabia, where it is used as an additive to coffee.

Electronic transition successful with other commodities The launch of the cardamom e-auction – albeit a month late – comes after the successful transition of other commodities, in particular pepper. However, a similar switch for tea has not run so smoothly since its launch in Coonoor in 2003. Last October, the Tea Board of India dropped IBM’s software after technical glitches. A new system, developed by a subsidiary of the National Stock Exchange, should be in place by November.

The NSW carbon trading scheme was on the brink of collapse as the falling price of credits looked likely to send several companies to the wall, reported The Age (13/9/2007, p.4).

Undermining CO2 efforts: “The announcement of a federal emissions trading scheme has caused the price of carbon credits to plunge from $12 to $6. This was undermining companies such as Easy Being Green, which helped households cut greenhouse gas emissions in return for carbon credits. Easy Being Green would hold a rally in Sydney, expected to be attended by hundreds of people protesting against the NSW Government’s decision not to bolster the Greenhouse Gas Abatement scheme”.

Govt inaction: “More than 1000 jobs would be lost through the collapse of the scheme, Easy Being Green chief executive Paul Gilding said. “The purpose of our company is not to make money but to cut carbon,” he said. “The real tragedy is that next year there will be 10 million tonnes of carbon that won’t be cut because this policy, which has been successful, will be scrapped. We know how to cut emissions, we have distributed 10 million low-energy light globes to NSW homes, saved households over $150 million a year off energy bills, but we can’t do it at the current prices. It is outrageous that the NSW Government hasn’t done more to extend the scheme.”

Governments need to scrap subsidies for biofuels because the rush to support alternative energy sources will lead to surging food prices and the potential destruction of natural habitats, the Organisation for Economic Co-operation and Development (OECD) warned, reported The Australian (12/9/2007, p.44).

Biofuels push to wreck markets, with little green benefit: The OECD said in a report to be discussed by ministers that politicians were rigging the market in favour of an untried technology that will have limited impact on climate change. “The current push to expand the use of biofuels is creating unsustainable tensions that will disrupt markets without generating significant environmental benefits,” said the authors of the study, a copy of which has been obtained by the Financial Times.

Taxpayers unlikely to be happy: The survey said biofuels would cut energy-related emissions by 3 per cent at most. This benefit would come at a huge cost, which would make them unpopular among taxpayers. The study, prepared for the OECD’s round table on sustainable development, is being discussed in Paris by ministers and representatives of a dozen governments, including the US. Also attending will be OECD secretary-general Angel Gurria, scientists, business representatives and non-governmental organisations.

EU biofuel target in spotlight: The survey questions the European Union’s plan to derive 10 per cent of transport fuel from plants by 2020. Only three kinds of biofuels are preferable to oil: Brazilian sugar, which converts easily to ethanol, by-products of paper-making and used vegetable oil. The EU said only biofuels that meet as yet undefined standards for sustainability will count towards its target to get a tenth of transport fuel from plants by 2020.

Call for global certification scheme: Tariff discrimination on sustainability grounds is illegal under World Trade Organisation rules and the authors call for a global certification scheme.

Changes to the Demand Side Abatement (DSA) Rule, implemented in October 2006, had resulted in an increase in the proportion of compact fluorescent lamps (CFLs) and water-efficient showerheads directly installed, reported NSW government greenhouse registry GGAS Newsletter, Issue 5 (10/9/2007).

Fewer giveaway programs: “In the quarter to June 2007, over 80 per cent of CFLs and 70 per cent of showerheads distributed by GGAS accredited Abatement Certificate Providers (ACPs) were installed rather than given away. Only two ACPs are now conducting giveaway programs,” the newsletter reported. “2.8 million CFLs were distributed in the quarter to June 2007, double the number distributed in the March quarter. In total, over 16 million CFLs have been distributed since the Scheme commenced. Over 60,000 showerheads were distributed in the same period, bringing the total number of showerheads distributed under the Scheme to 1.3 million.”

Varied business models: “There are now 10 ACPs accredited for projects distributing CFLs and showerheads, with nine applications currently under consideration by the Scheme Administrator,” the newsletter said. “In response to the growing variety of business models used by ACPs and applicants, the Scheme Administrator recently circulated for comment proposed minimum requirements for Default Abatement Factor (DAF) installation programs. These seek to achieve consistency across the Scheme with respect to legal relationships between ACPs and installers, installer training, and customer service. Currently, the Scheme Administrator is evaluating the feedback received. Accredited ACPs will have a two month period to adjust their programs before the minimum requirements are introduced. The Scheme Administrator would like to thank all those who provided feedback on the proposal.”

Over the past two years, the level of interest in using NSW Greenhouse Abatement Certificates (NGACs) to voluntarily offset greenhouse gas emissions had increased significantly, according to the GGAS Newsletter, of the NSW government, Issue 5, (10/9/2007). “Much of this interest comes from increasing desire to achieve a ‘carbon neutral’ status by individuals and organisations,” the newsletter said. “Evidence suggests NGACs are considered to have broad appeal as a standard instrument traded on the open market representing one tCO2-e of abatement.

For the 2006 calendar year;

• 2,660 NGACs were voluntarily surrendered and this year to date;

• over 6,100 NGACs have been voluntarily surrendered.

To facilitate this ‘voluntary’ market participation, the GGAS Registry was upgraded in 2006 to allow organisations other than benchmark participants (the liable parties) to surrender NGACs. It should be noted that while the Scheme Administrator accepts voluntary surrenders through the Registry, it does not provide any verification as to whether the volume of NGACs surrendered equates to the participant achieving carbon neutrality.”

Surrendered certificates cannot be reused: “To voluntarily surrender (also known as retire) NGACs, an account on the Registry must be opened and NGACs transferred into that account. Certificates can then be surrendered on the Registry.

Not an offset: Purchasing and holding NGACs in a Registry account does not equate to achieving an offset. NGACs must be surrendered to be effective in offsetting a participant’s carbon footprint. There are important deadlines that voluntary participants need to consider when deciding to surrender NGACs. Individuals can voluntarily surrender NGACs at any time between 1 July and 20 June of each financial year.

Certificates that have been surrendered before 20 June of each financial year will be accepted by the Scheme Administrator and on 30 June of each year all surrendered certificates will be cancelled by the Registry and the certificates cannot be un-surrendered or reused. As a tradeable commodity with a market value, voluntary participants should carefully consider the volume of NGACs they wish to surrender to offset their carbon footprint, as once surrendered, the commodity cannot be retrieved.”